Tax Question...

Reply #4

erobinson32 — Sun, 15 May 2005 01:05:47 GMT

What is the part about the federal tax being capped on long-term capital gains? Why is it only 15%? Somone please explain, I'm confused.

Reply #3

ryanm — Sun, 15 May 2005 00:07:38 GMT

I don't think you would be liable for social security tax, and I highly doubt local taxes would be involved, although I am not sure on that.

Reply #2

twisted — Sat, 14 May 2005 21:03:45 GMT

If the powerball annuity value is $111 million then the cash value is around 55%-56% of the annuity. This leads to $62.4 million in cash value. The lottery withholds 25% federal tax and whatever your state tax liability is (depending upon your state). At the end of year, you would still owe 10% more to the federal government (the federal tax rate is 35% on anything over $319,100). So $62.4 million * 65% = $40.56 millionSince I live in a state without any state tax on lottery winnings I would... [ More ]

Reply #1

CASH Only — Sat, 14 May 2005 20:16:59 GMT

The 25% is federal WITHHOLDING, and is applied towards your federal tax liability.

Tax Question...

erobinson32 — Sat, 14 May 2005 20:11:20 GMT

Say someone won the Powerball this week at $111 million in South Carolina or Rhode Island (7% state).The Jackpot Analysis says that there is a 25% federal tax, and then a 7% state tax, leaving you with...$42,432,000after taxes and lump sum.Would you then at the end of the year have to pay the 35% federal income tax, which would bring you to...$27,580,800.00I just don't understand how much a person who wins this would ACTUALLY come away with after all taxes have been taken away? Could sombody ple... [ More ]